This week started like the last one with a broader
rally in the markets as the risk sentiment got supported by another lack of a
ground operation in Gaza over the weekend and the positive news about a couple
of hostages being released. Yesterday, on the other hand, we got the complete
reverse with the markets opening lower and selling off for no apparent reason
except a reaction to some key resistance levels. The selloff accelerated in the
evening as the Israeli PM Netanyahu said
that they were preparing for a ground invasion. Will we see another selloff
into the weekend?
Nasdaq Composite Technical Analysis
– Daily Timeframe
Nasdaq Composite Daily
On the daily chart, we can see that the Nasdaq
Composite rejected the key 13174 level and sold off back into the bottom trendline. This is
where we can expect the buyers to step in again with a defined risk below the
trendline to position for a rally back into the 13174 level.
Nasdaq Composite
Technical Analysis – 4 hour Timeframe
Nasdaq Composite 4 hour
On the 4 hour chart, we can see that we have a divergence with the
MACD right at
the bottom trendline. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. In this case, it’s another layer of confluence for the
buyers but if the price breaks below the trendline, the bullish setup would be
invalidated and the sellers will increase the bearish bets into the 12274
level.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
Nasdaq Composite 1 hour
On the 1 hour chart, we can see more
closely the price action at the trendline and we can notice that we indeed got
already some reaction from it yesterday. From a fundamental perspective, the
Nasdaq Composite is more likely to fall due to very high geopolitical risk,
especially into the weekend as the market might want to keep it safe, but watch
out for good news as they could trigger strong relief rallies.
Upcoming
Events
Today, we will see the US Jobless Claims data with
the market likely focusing on the Continuing Claims figures as they’ve been
recently showing some softness. The market may not like bad data given the
fragile risk sentiment. Tomorrow, we will get the US PCE report, which is not
expected to change anything for the Fed at this point in time.